The Dreaded B-Word

If you dread the B word and wish you could manage your money without brown-bagging your lunch or fretting about your heating bill, maybe you can—and maybe you should.

The cutbacks and micromanaging that drive conventional budgets steer people in the wrong direction, argues financial planner Michael Rubin, author of "Beyond Paycheck to Paycheck." My two favorite points from his anti-budget post on Mint.com:

Think big. Slicing and dicing your daily expenses won't save as much as reining in big-ticket items, e.g. your home, car, commute, or (for many of us gals) clothes, accessories, grooming. Imagine a smaller mortgage that saves you $300 a month, or ditching your gym membership and saving $600 a year.

Budget your savings. Rather than monitoring what you spend, focus on saving more—kick up your 401k contributions, sock away more in your emergency fund. "If you're saving 15% of your income, who cares what you do with the other 85%?" asks Rubin.

Rubin is right. In "The Two-Income Trap," a groundbreaking analysis of why many middle-class Americans go broke, authors Elizabeth Warren and Amelia Tyagi make the same point. An affordable life doesn't require skimping on lattes, but it does require a reexamination of your overall lifestyle.

What makes it easier to live within your means, without the constant discomfort of a belt that's too darn tight? Oddly enough, in the physics of personal finance, saving is what balances the equation. Pushing yourself to save more, and save first, soon creates a de facto budget that inspires you to spend less and make smarter choices—but without feeling there's a noose, or a spreadsheet strangling your life.